Sam’s Club vs Costco (vs BJ’s) – Best Wholesale Club in 2020
Want to save up to 25% on your groceries? (Let’s face it, who wouldn’t?) Then a wholesale club might be the answer.
However, which one should you sign up for? As the two largest wholesalers in the U.S, the Sam’s Club vs Costco question is a common one. There’s also BJ’s of course. All 3 have good and bad points.
And that’s exactly what we will look into today. If you’re thinking about joining a wholesale club, we will give you the lowdown on each of the ‘big 3’ so you can determine which is the best wholesaler for you.
For our findings at a glance, just head to the table below. For a full Sam’s Club review comparison with Costco and BJ’s, keep on reading.
The Best Wholesale Club in 2020
The 3 Largest Wholesale Clubs in America
To begin with, we have produced a detailed comparative review of Costco and Sam’s Club. Then follows a standalone review of BJ’s so that you can also compare what they have to offer.
Before we jump into the reviews however, it’s time for some formal introductions:
Sam’s Club is the largest warehouse/wholesale club in the world and it has stores in USA, China, Mexico, and Brazil. It is owned by Walmart, and in 2009, it boasted of 47million paid members and 597 outlets in the US alone. It was founded in 1983 by Walmart and currently operates as its subsidiary.
Costco is the trading name of Costco Wholesale Corporation, and it is the second largest operator of membership-only warehouse/wholesale clubs in the world with 749 outlets that are spread across the USA, and in Mexico, Canada, United Kingdom, France, Australia, Spain, Taiwan, Iceland, Japan, and South Korea. It currently boasts of over 90.3 million paid members.
BJ’s Wholesale Club
BJ’s is the third largest membership-only warehouse club and it operates only in the US, where its outlets are found in Ohio and the East Coast.
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Comparative Review: Costco vs Sam’s Club
This comparative review between the 2 largest warehouse clubs focuses on comparison (and some analysis) at 7 different levels: locations, merchandise on sale, their average prices, payment methods, product return policies, and membership perks including each of registration and membership levels, as well as the hours of operation.
These levels are also used in the review of BJ’s. The utility of these levels is that it not only allows for a well-rounded Sam’s Club vs Costco review, but it also allows for a decent compilation of Sam’s Club Reviews, BJ’s Reviews, and Costco Reviews into one logical presentation.
Round 1: Locations
Sam’s Club currently operates a total of 805 warehouse clubs across the globe. This is after Walmart closed 63 warehouse clubs in the US in January 2018, hence reducing the number of outlets to 597 membership clubs that are spread across 44 states.
The 6 states that are not services by Sam’s Club are Washington, Alaska, Vermont, Oregon, Massachusetts, and Rhode Islands.
Internationally, Sam’s Club operates 162 outlets in Mexico, 19 outlets in China and 27 outlets in Brazil. This is after it terminated its operations in Canada in 2009. As expected, the higher the number of locations a warehouse club has, the higher the chances that one can locate a store near his/her residence.
Even so, proximity to residence is what counts most, as it is prudent to buy bulk quantities from the nearest stores so as to save on transport costs and time.
Costco currently operates 749 membership-only warehouse clubs across the globe. Of these 519 outlets are spread across 44 U.S states, while 98 outlets are located in Canada and Mexico has 38 outlets.
There are no other outlets in the Americas, and the remaining outlets are distributed across Asia, Oceania and Europe. In Asia, it operates 26 outlets in Japan, 14 outlets in Korea, and 13 outlets in Taiwan. It also runs 9 outlets in Australia, while in Europe, it operates 98 outlets in the United Kingdom, and 2 in Spain while France and Iceland boast of a single warehouse club each.
The importance of stating the number of international outlets managed by a warehouse club is that it describes how easily it can source foreign goods for American consumption.
This means that Sam’s Club can source goods directly from China, which is the largest manufacturer of products for the export market.
Even so, Costco can easily source for car parts and electronic appliances from Japan, hence its prices for these Japanese-made goods are most likely to be lower than the prices offered by other warehouse clubs. Even so, by sourcing foreign goods directly from the world’s largest producer of such goods, Sam’s Club gains an edge over Costco.
By deduction, the higher number of warehouse clubs that Sam’s Club operates in the U.S as compared to those run by Costco makes Sam’s Club the better warehouse club as a customer is more likely to find Sam’s Club as the nearest store as compared to Costco.
Round 2: Range & Quality of Merchandise
Rang and quality of materials is clearly an important variable to consider when choosing which warehouse club to pay for a membership to.
Let’s take a closer look…
The merchandise inventory of Costco is quite fluid because the warehouse club stocks seasonal items whose sales are discontinued during the off-peak seasons.
Even so, it sells a broad range of products, with the tradeable items being grouped into electronics, home furniture, office equipment and furniture, automobile parts and accessories, grocery, garden supplies, pet supplies, children’s accessories, sporting goods, toys, jewelery, computers and computer accessories, wines, and health and beauty products.
Originally, its merchandise were sold in bulk quantities, and most were packaged into warehouse-style steel bins that were mounted on pallets, but because some products such as software, books, and artwork cannot be packaged this way because of their fragility, Costco now sells some of its merchandise in non-pallet form.
This decision to sell products in both pallet forms and non-pallet forms has allowed Costco to offer some of its merchandise in slightly smaller quantities as compared to equivalent merchandise offered by Sam’s Club.
This in turn reduces the cost per package which makes it desirable to bargain hunters.
Even so, the cost of individual items can remain the same, or even slightly higher as compared to similar items sold by Sam’s Club; and this makes such merchandise not equally appealing to small business owner who prefer larger quantities as it proportionally increases their quantity discounts.
Another advantage of this trade model is that it allows Costco to run gas stations, tire garages, pharmacies, eyecare centers, hearing aid centers, and photo processors in their warehouse club.
Also, it allows Costco to operate walk-in refrigerators which can stock bulk quantities of perishable products, and this improves the quality of its products.
By now, it is evident that Costco focuses in selling fewer items per package (as compared to Sam’s Club) so as to reduce package prices as well as ensure that only quality products are sold.
This focus on product quality has allowed Costco to develop the Kirkland Signature as its private label so as to vouch to the high quality of the products, which ultimately improves consumer confidence in Costco’s merchandise.
Sam’s Club Review
Sam’s Club maintains a large inventory of its merchandise which is sold using the warehouse model. This means that the warehouse clubs are designed as normal warehouse where the merchandise are sold in bulk quantities, and are packaged into warehouse-style steel bins that are mounted on pallets.
This packaging system applies to the following categories of products; electronics, home furniture, office equipment and furniture, automobile parts and accessories, grocery, garden supplies, pet supplies, children’s accessories, sporting goods, toys, jewelery, wines, and health and beauty products.
Moreover, each Sam’s Club come with a built-in annex where non-warehouse packaged products are traded, and in this annex are different department each catering for specific products.
These departments include;
- the pharmacy department,
- tire and battery department,
- bakery department,
- florals department,
- cafe department,
- photo department, and optical department.
Sam’s Club has also developed 5 private labels for specific product categories, and these labels are Simply Right, Bakers & Chefs, Member’s Mark, Sam’s Club, and Daily Chef. Just like Costco, these private labels are designed to vouch to the high quality of the products.
Likewise, Sam’s Club has more private labels than Costco because it stocks a more diverse range of products than Costco because most of the foreign-made products are sourced directly form their manufacturers in China and Brazil.
Even so, as mentioned earlier, Costco offers better deals in automobiles spare-parts and accessories, along with other Japanese-made electronic products.
Likewise, if the quality of groceries are concerned, the Costco offers a better product quality than Sam’s Club.
Regardless, the diverse range of products sold by Sam’s Club along with its lower price-per-item as compared to Costco makes Sam’s Club the better of the two warehouse club.
Round 3: Merchandise Price Comparison
The stake in price comparison is difficult to determine because of the differing quality of products offered by the 2 warehouse clubs.
However, for products sourced from the same manufacturer and traded in their factory-packaged quantities, Sam’s Club tends to sell most of its merchandise – with the exceptions of automobile accessories and Japanese-made products – at a lower item price as compared to Costco.
Even so, when it comes to grocery, Costco offers the better deal because it sells better-quality groceries at almost the same price as that offered by Sam’s Club.
Likewise, if one does a price comparison using the item price catalogue that are published in the official websites of Sam’s Club and Costco, it is evident that the Sam’s Club is pricier when it comes to popular name brands as compared to Costco.
This is because Sam’s Club trades in greater quality and some of the brands are simply overpriced from the factory, while Costco avoids overpriced brands in favor of its own generic Kirkland-branded merchandise.
Therefore, if one favors branded products over generic products, then Sam’s Club offers the better deal (which is ironically overpriced when analyzed in current market rate terms).
Even so, when it comes to general non-perishable popular merchandise, most of them have a lower price tag in the price catalogue of Sam’s Club as compared to the one of Costco. This also applies to price comparison done using receipts of similar goods purchased from the 2 warehouse clubs at the same time period.
Round 3: Hours of Operations
As mentioned earlier, it is prudent for one to shop in the nearest warehouse club because it saves both time and transport cost.
The time factor is important because if one lives far, he/she can fail to reach their desired warehouse club on time and find them closed. For this reason, it is important for one to note the hours of operations of the warehouse clubs of his/her choice.
For Sam’s Club, the hours of operation are broken down as described hereafter. On weekdays, it opens from 1000hrs and closes at 2030hrs.
On Saturday, it opens from 0900hrs and closes at 2030hrs which makes Saturday the ideal shopping day from most salaried bargain hunters.
Moreover, Sam’s Club offers a early shopping hours for its members who have subscribed to the Business and Plus membership plans, and these members can start shopping at 0700hrs from Monday to Saturday. On Sunday, it operates from 1000hrs to 1800hrs.
The hours of operation of Costco are as follows; from Monday to Friday it opens at 1000hrs and closes at 2030hrs, while in Saturday, it opens at 0930hrs and closes at 1800hrs. On Sunday, it operates from 1000hrs to 1800hrs.
Round 5: Payment Methods
Sam’s Club accepts Walmart and Sam’s Club credit cards for both their in-store and online storefronts trades. Other payment options include using Discover Card, MasterCard, Visa, and American Express credit cards, as well as PIN-based debit cards (except for those provided by Discover and MasterCard).
In 2009, it also rolled out a policy guideline that allows it to accept EBT SNAP. Moreover, Sam’s Club outlets also accept cash and check payments, as well as Walmart gift cards.
With regards to Sam’s Club credit cards, they are linked to the membership card of the buyer, and some of the cards offered are chip-enabled EMV(Europay-Mastercard-Visa) cards.
The Sam’s Club Mastercard program offers a 5 percent cash-back offer on annual gasoline purchase of up-to USD6,000.
This MasterCard also doubles as the membership card and attracts no annual ledger fees. It also supports 3 percent cash-back on travel and dining purchases, while other purchases attract a 1 percent cash-back.
Costco allows one to shop using Visa cards, debit or ATM cards, and Costco credit cards. Cash is also accpeted, as well as checks which need to have a picture identification and check payments are subject to approval by the branch manager or supervisor.
Moreover, EBT and Costco Cash Cards are also accepted. The only exception is Costco car washes and gas stations which decline EBT, cash, and checks as payment options.
The Costco credit card is a branded Costco Anywhere Visa that doubles as the membership card and attracts no annual maintenance fees.
It also supports 4 percent cash-back for annual gasoline purchases of 7,000USD, a 3 percent cash-back on travel and dining purchases, while other purchases attract a 1-2 percent cash-back.
With regards to payment options, Sam’s Club offers the better deal by accepting payments made using credit cards provided by the four major card providers.
Moreover, the credit card perks of branded Sam’s Club cards offers a better cash-back program as compared to the cash-back program of the branded Costco credit card.
Round 6: Product Return Policies
Both Costco and Sam’s Club offer generous return policies for the products they sell, and these policies can be read in the return policy page of their respective official websites.
Their return policies are similar on several grounds including membership policies where both warehouse club promise a full refund (of the membership cost) if one is unsatisfied by the membership.
Likewise, with regards to perishable products including cigarettes and alcohol, and those on time-restrained warranty products such as electronics; both warehouse clubs lists them as non-returnable items.
However, apart from perishable goods, Costco lists fewer items in its non-returnable catalogue while it also allows for certain warranty-constrained items to be returned within a specified (albeit very short) time frame.
Therefore, with regards to return policies, Costco gains a slight edge over Sam’s Club.
Round 7: Membership Cost & Conditions
Wholesale clubs are membership-only retail outlets, and this differentiates them from ordinary wholesalers who can sell any of their merchandise to anyone so long as they can afford to purchase the bulk goods.
Expectedly, both Sam’s Club and Costco require one to purchase membership in order to purchase their merchandise. However, there are exceptions with regards to health-care services such as eyecare, hearing aids, and pharmacy services where Federal Laws prohibit preferential sales of prescription drugs and health-care services to members only.
Likewise, some states prohibit preferential sale of gasoline and liquor to members only. In these 2 instances, both Sam’s Club and Costco provide health-care services, pharmaceutical supplies, alcohol, and gasoline to non-members. The cafeteria is also exempted from the members-only rule, and anyone can eat in them.
However, for all other merchandise in the warehouse, one needs a membership card to purchase them. Even so, non-members can still purchase some of these merchandise but with the price increased by 10percent.
For Sam’s Club, membership can be purchased offline at either the dedicated Membership Services desk of a Sam’s Club store or at any authorized ATM/Membership Kiosk.
One can also purchase membership online through the official website. These membership is graded into 2 levels. The first level is the Sam’s Club Business and Sam’s Club Savings plan which cost USD45.
The second level is the Sam’s Club Plus plan which costs USD100. Each plan comes with its own annual fee charges. The Plus membership is a comprehensive plan that comes with cash rewards, free shipping perks, and extra savings on optical and pharmacy charges. This cash-back reward for general merchandise starts from annual purchases of USD500.
Membership for Costco can be purchased online through its official web portal or offline at the dedicated Membership Services desk of a store.
Like Sam’s Club, Costco’s membership is graded into 2 levels. The first level is the Gold Star or Business plan which cost USD60. This can be upgraded to the second level.
The second level is the Executive plan which costs USD120. Each plan comes with its own annual fee charges. As expected, the Executive membership is a comprehensive plan that comes with cash rewards, free shipping perks, and extra savings on pharmacy charges. Its cash-back reward for general merchandise starts from annual purchases of USD1000.
Therefore, regarding membership, it is evident that Sam’s Club offers the better deal as its membership costs are lower than those of Costco as well as its cash-back programs offers rewards for sales of USD500 as compared to USD1,000 that Costco gives as its cut-off sales for reward.
Sam’s Club vs Costco Summary
In summary, Sam’s Club offers the better deal when it comes warehouse club perks as compared to Costco.
This is because Sam’s Club has lower membership fees, has better payment options, offers diverse range of products at competitive rates as well as has more outlets and has longer hours of operations as compared to Costco.
That being said, the differences are marginal so if you find yourself living closer to one than the other, this really could be the deciding factor.
However, with that aside, Sam’s Club is our number one choice membership-based wholesaler. Click below to check out the latest signup deals on offer.
This warehouse club was started in 1984 in Massachusetts and has continuously developed and expanded, while changing ownership, to come to cover the East Coast as well as Ohio.
It currently operates 200 membership-only warehouse clubs across 15 states, and there its main rivals are Costco and Sam’s Club. Because BJ’s does not have outlets outside the USA, it has to source for foreign-made goods from either the manufacturers, authorized wholesalers, or distributors.
The introduction of wholesalers and distributors in the supply chain means an increase in the merchandise price, and this price increase is transferred to the end consumer. This explains why its outlets sell most of their merchandise at a slightly higher price than either Costco or Sam’s Club.
Like Costco, BJ’s maintains a highly fluid merchandise inventory because it stocks seasonal items whose sales are usually discontinued during the off-peak seasons.
Moreover, it trades in organic produces, and encourages farmer to sell their organic products to them, and this allows the firm to increase it inventory of organic groceries.
Its also sells a broad range of products which are grouped into electronics, home furniture, office equipment and furniture, automobile parts and accessories, grocery, garden supplies, pet supplies, children’s accessories, sporting goods, toys, jewelery, computers and computer accessories, wines, and health and beauty products.
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This product categrorization shows that BJ’s sells its merchandise in both pallet-based and non-pallet bulk formats. Using these formats also allows BJ’s to offer some of its merchandise in slightly smaller quantities as compared to factory packaging, and this reduces the cost per package which makes it desirable to bargain hunters.
Even so, the cost of individual items can remain the same, or even slightly higher as compared to similar items sold by Sam’s Club and Costco; and this makes such merchandise not suitable for small business owners.
This trade model also allows BJ’s to run gas stations, tire garages, pharmacies, eyecare centers, hearing aid centers, and propane filling stations in their warehouse club. With regards to generic merchandise, BJ’s has developed 2 private labels; Berkley-Jensen and Wellsley Farms, for non-perishable and food items respectively.
It accepts Manufacturers’ Coupons as a mode of payment for both their in-store and online storefronts trades. Other payment options include using Discover Card, MasterCard, Visa, and American Express credit cards, as well as PIN-based debit cards. It also accepts cash and check payments, along with payment done through EBT SNAP.
With regards to return policies, it offer generous return policies for the products they sell, and these policies can be read in its return policy page in the official website.
It offers a full refund (of the membership cost) if one is unsatisfied by the membership. Likewise, with regards to perishable products and time-restrained warranty merchandise such as electronics; it lists them as non-returnable items.
Expectedly, BJ’s require one to purchase membership in order to purchase their merchandise. However, there are exceptions with regards to health-care services such as eyecare, hearing aids, and pharmacy services where Federal Laws stipulates a set of prohibitions that have been described above.
Moreover, non-members can still purchase general merchandise but with the price increased by 15percent. With regards to its membership plans, it offers 2 levels of membership; the Inner Circle that costs USD55 per annum and the Rewards level which costs USD110 per annum.
The Rewards membership is a comprehensive plan that comes with cash rewards, free shipping perks, and extra savings on health-care and pharmacy charges.
A short history of the wholesale club
The history of the warehouse club dates back to 1954 when Sol Price established FedMart as a discount store, which was later expanded by Price and his sons in 1976 into the first warehouse club, the Price Club.
Six years later, John Geisse- an ardent advocate of discount trading – established The Wholesale Club(TWC) which was located in Indianapolis.
A year later, Kmart founded Pace Membership Warehouse; while Costco Wholesale started operations officially. In 1984, some former executives from TWC established BJ’s. In 1991, Giesse sold TWC to Sam’s Club; and in 1993, Sam’s Club acquired Pace Membership House from Kmart.
Modern business practices prioritize on sales volume and profit margin.
According to the Laws of Economics, a good profit can be realized by selling a single item at a high price or by selling many items at a budget (or discounted) price.
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High product prices usually results in low sales volume, while discount prices are associated with high sales volume. This explains the utility of quantity discount for businesses.
This form of discount is given to customers who buy goods in bulk, and the rationale behind it is that if each item is sold at a discounted price which in turn leads to many items being sold, then the trader realizes a decent profit margin. For customers, quantity discount necessitates them to purchase products in wholesale amounts.
In the USA, creative entrepreneurs came up with an innovative business model which supported wholesale purchase of products from large retailers. This model was called a warehouse club, and its present iteration has led to the development of an alternative term, a wholesale club.
A warehouse/wholesale club is a dedicated retail store that sells no-frills merchandise in wholesale quantities usually to a select group of customers.
The no-frills format of their general merchandise allows them to sell their products at a low price as compared to normal retail stores (and even some wholesale traders), and this makes them attractive to 2 types of customers; small-business owners and bargain hunters.
Likewise, most of these clubs only sell their merchandise to only select customers, and these customers are sourced through paid memberships. This means that the customers are required to pay a recurrent membership fee on an annual basis (or any other specified terms of recurrency).